The Haryana government has decided to reduce the value added tax (VAT) on the scientific instruments manufacturers in the states. The rate of VAT has been reduced to 5% from 12.5% .
A senior official in the department of Excise and Taxation told Business Standard that the new VAT rate would be effective from the date of notification and the notification in this regard would be issued in a few days.
He said that the new rate will be applicable to the sale of scientific instruments within the state and outside the state. It is noteworthy that about 90% of the scientific instruments manufactured in Haryana are sold outside the state. The Scientific instruments manufacturing units are concentrated in district Ambala and it is the oldest SME cluster in the state. There are close to 3000 units in Ambala operating at micro, small and medium scale.
According to Ashwani Gupta, a senior member of the Association of the Scientific Instruments Manufacturers Ambala, the announcement will have an impact only if actually implemented, the industry has been in dire straits for the past two decades. The industry had been demanding rationalisation of VAT for few years. This would help the industry to compete with cheaper Chinese products and become more competitive in international market.
The department of Excise and Taxation is yet to prepare the estimate the loss of revenue on account of partial rollback of VAT on scientific instruments.
